The Royal Bank of Scotland could be privatised just months before the 2015 general election, its chief executive revealed today.

Stephen Hester said the largely state-owned bank will be ready for sale within about two years. The timing could allow the Coalition to give shares in the scandal-hit institution to millions of voters just before the election.

George Osborne could even get an election war chest, if shares in RBS rise significantly in the next two years.

Today the Chancellor backed efforts to speed the bank’s refocusing as a British business. “The Government’s strategy is for RBS to be a stronger and safer bank, which in time can be returned to full private ownership,” he said.

“I have been very clear that I want to see RBS as a British-based bank, focused on serving British businesses and consumers, with a smaller international investment bank to support that activity rather than to rival it. I welcome RBS’s announcement today to accelerate that strategy.”

But Royal Bank of Scotland faced fresh criticism today when it revealed bonuses of £607 million for staff last year, despite losses of £5.2 billion after a “chastening” year. The losses widened from £1.2 billion the previous year, after a £390 million settlement for Libor rate-fixing. The bank also revealed another £1.1 billion in provisions to cover claims over mis-selling.

The bonus pool includes £215 million for investment bankers. But RBS said that to recoup £302 million for its Libor settlement, it was cutting last year’s bonus pot, clawing back from previous years and reducing awards for the current year. Mr Hester said privatisation of the bank, which is 81 per cent state-owned, was now within sight. “I think RBS will be ready to be privatised within the next couple of years — when the Government decides to do it is a matter for them,” he told BBC Radio.

Asked if he would be taking £780,000 in shares next month, Mr Hester said: “Yes, I am ... it’s the only bonus in four years I have taken. [It] is something that the board clearly felt was merited.”

Chris Leslie, Labour’s shadow financial secretary to the Treasury, warned against selling off RBS too soon. “The timing is a decision for ministers, but it must be based on the best long-term interests of the taxpayer, not driven by George Osborne’s short-term political timetables,” he said.

RBS got a a £45.5 billion state bailout in 2008. The taxpayer’s loss on the shares, if they were to be sold now, would be just over £15 billion. The Liberal Democrats have backed the idea of giving shares in the bank to the public, a move not ruled out by Mr Osborne.

Nearly a third of middle and senior management jobs at the Bank of England are now held by women — up 50 per cent on a decade ago.